Finding 1141533 (2024-002)

Assistance Listing Numbers: 14.871, 14.879 – Housing Voucher Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-through Entity: N/A Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria The OMB Compliance Supplement for the Housing Voucher Cluster requires that grantees must establish and follow their own written procedures for selecting applicants from the waiting list. 2 CFR 200 requires that internal control over compliance be established to provide reasonable assurance forcompliance. The Council’s established policies require the use of a multi-tiered scoring system that assigns a numeric value to each applicant on the waiting list. When open vouchers are available, the policy requires selection in the order of score, with applicants having the same score being selected randomly. Condition During our audit testing, we inspected the Council’s waiting list as of the beginning of fiscal year 2024 and noted that all Housing Choice Voucher (HCV) applicants were assigned a score of zero. Cause A software user error when setting the waiting list caused all HCV applicants to not be assigned a score based on the established criteria. Effect As described above, applicants with identical scores are selected at random. Thus, in fiscal year 2024, all applicants admitted to program from the waiting list were effectively selected at random. Recommendation We noted that management detected this software error and corrected it subsequent to fiscal year 2024 and before the performance of our audit procedures. We recommend that management establish review procedures to ensure that automated processes are being performed in accordance with established policies and procedures. Management’s Response We agree with the finding and intend to incorporate a manual review of the selection process each time selections are made from the waiting list.